2014 Real Estate Predictions for Palos Verdes
We are already two weeks into 2014. So, now’s a prime time to take a look at what’s in store for us this year in the world of real estate on the hill.
Signs point to another good year for the housing market, although the recovery most likely won’t clock the same breakneck speed as last year. 2013 sales were brisk with many homes that had sat on the market for 1-3 years actually selling. This was due to extremely low inventory.
Here are 5 predictions, made by experts in the field, to help prepare you for any home-selling or buying activities this year:
1) Home prices will continue to rise: The chief economist for the National Association of Realtors, Lawrence Yun, foresees home prices rising by 6 percent. This is about half of the increase in home values seen in 2013, indicative of 2014’s reduced pace.
Keep in mind this is in markets all across the United States. In some higher end markets like Palos Verdes, Rolling Hills and the Beach cities, those sale prices should remain stable but not likely to increase in 2014.
2) So will mortgage rates: The low-interest rates of 2013 are not going to stick around. We go again to Lawrence Yun, who predicts that the average rate for a 30-year fixed mortgage will climb to 5.5 percent before the year is over. This means again, sales will be focused on the lower priced arena and some having to reduce prices to get the same buyer who needs a loan for purchase.
3) Fewer foreclosures on the horizon: Thankfully, the worst of the foreclosure catastrophe that devastated so many Americans appears to be history. According to Daren Blomquist, who monitors the foreclosure market at RealtyTrac, “We’re in the home stretch of getting through the foreclosure crisis, but we won’t cross the finish line, with filings back to pre-crisis level, until early 2015.”
4) Borrowers can expect more ease in securing a mortgage: Although interest rates are expected to rise, Erin Lantz, director of mortgages with Zillow, points to a “silver lining.” Lantz says that “rising rates means lenders’ refinance business will dwindle, forcing them to compete for buyers by potentially loosening their lending standards.” That’s encouraging. However debt to income ratio has decreased and that is going to affect a percentage of buyers who won’t qualify for a higher loan amount. Typically this will mostly affect younger buyers who still have mountains of school loans, but also people who own multiple properties, cars with loans and credit card debt.
5) Rental market to stay strong: Because of items 1 and 2 above, along with other factors such as a decline in home-ownership and a surge in Americans on the move, forecasters at Zillow envision a robust rental market in 2014. Rent prices are on the increase.
If you are planning to sell your property in 2014, it’s super important to hire a Realtor who knows the market, uses creative marketing and works with a company that has world-wide reach. The more unique the property and the higher the list price, the more important this becomes.